Coca-Cola to shut Tuas plant; plans investment to move up value chain

Singapore

COCA-COLA Singapore Beverages (CCSB) will close its bottling plant in Tuas by February next year, but it has also committed to invest over US$100 million in its Singapore operations over the next five years to move up the value-chain.

About 200 employees in Singapore will be affected by the plant's closure, said CCSB, which will be moving its bottling plant operations to Malaysia.

"To better position itself for future growth, Coca-Cola is adjusting its strategy in Singapore to focus on high-value added services such as new technologies, innovation and research," said Stephen Lusk, chief executive of Coca-Cola Singapore Beverages & Coca-Cola Bottlers Malaysia.

Mr Lusk also said that the decision to close the plant was a strategic one, driven by the need to better position CCSB to meet future growth.

CCSB, the Employment and Employability Institute (E2i) and the Food, Drinks and Allied Workers Union (FDAWU) will be working closely with the affected employees, who will be offered "competitive" severance packages as well as support services.

CCSB will continue to employ some 450 people while retaining its existing product portfolio, sales force, and sales and marketing, warehousing, distribution, procurement, finance/administration, human resources, legal and IT functions, it said in the statement on Monday.

CCSB will also continue to employ about 300 people across its other operations in Singapore, where it has had a presence for 79 years. Since 2010, it has also invested some US$100 million across its entire business in Singapore.

This comes as the government has been pushing for firms to boost productivity as it encourages companies to curb their reliance on cheap foreign labour amid tightening foreign worker quotas.

Kevin Lai, executive director of consumer businesses of the Economic Development Board, added: "We are confident that Singapore remains a strategic business location for Coca-Cola. This is demonstrated by their commitment to invest in high-value added activities here, such as expanding their state-of-the-art concentrate plant, which supplies beverage concentrate to key markets throughout Asia-Pacific. The government remains committed to working with companies in this industry, to continually invest in research and development, technology adoption and skills training."

Singapore's consumer business industry is expected to create 2,400 jobs and S$2.1 billion of value added from 2014 to 2016.

"When FDAWU was informed of Coca-Cola's plans, it quickly commenced discussions with CCSB to ensure fair compensation and treatment for the affected employees," said Tan Hock Soon, general secretary of FDAWU. "CCSB was committed to this, and has been open to the union's requests and suggestions."

Of the 200 affected employees, 70 are said to be union members.

In a separate statement, FDAWU highlighted that CCSB has offered terms which are "beyond" industry norms, such as more than one months' salary per year of service and counselling support. CCSB will also reimburse one year's union membership fees.

Meanwhile, FDAWU has teamed up with NTUC's e2i to help the affected employees prepare for potential employment opportunities. About half of the 200 employees, who are Singaporeans and Permanent Residents, will attend a two-day employability camp. In addition, a five-day medical technology course and two-day food hygiene course will also be offered. Successful participants will be given a completion bonus by CCSB.

Meanwhile, FDAWU and e2i are making arrangements for the affected employees to attend a job fair in November at e2i. One of FDAWU's union leaders has also accepted a one-year employment contract from CCSB as a quality control technician to attend to the needs of the affected workers.